(a) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑Ss. 2(2), 2(9), 3, 17‑B & 21‑‑‑Income Tax Ordinance (XXXI of 1979), S.2(16)(bb) [as added by Finance Ordinance (XIV of 1983)]‑‑ Companies Ordinance (XLVII of 1984), S.2(7)‑‑‑Charge of wealth tax‑‑ Trust, whether a company‑‑‑Trust not included in charging S.3 of Wealth Tax Act, 1963 or in definition of "company" as given in S.2(7) of Companies Ordinance, 1984‑‑‑According to S.2(2) of Wealth Tax Act, 1963, words and expressions used, but not defined in the Act would have meanings assigned to them under Income Tax Ordinance, 1979.‑‑‑Trust was included in definition of "company" as given in S.2(16)(bb) of Income Tax Ordinance, 1979‑‑‑Such fiction of law was not found in, definition of "company" as given in S.2(9) of Wealth Tax Act, 1963‑‑ Held, since expression "company" as used in Wealth Tax Act, 1963 was defined in S.2(9) thereof, same could not be interpreted with reference to definition of expression "company" as given in the Income Tax Ordinance, 1979‑‑‑Trust was not liable to charge of wealth tax.

(b) Interpretation of statutes‑‑‑

‑‑‑‑ Definitions given in a statute‑‑‑Not applicable to other statutes unless adopted through legislation by incorporation or reference‑‑‑Definitions given in a particular statute are to be employed for the purpose, of that statute only until and unless said definitions are adopted by any other statute through legislation by incorporation or reference.

(c) Interpretation of statutes‑‑‑

‑‑‑‑ Taxing statute‑‑‑One has to look merely at what is clearly stated therein‑‑‑No room for any intendment ‑‑‑No presumption as to a tax‑‑ Nothing is to be read in ‑‑‑Nothing is to be implied‑‑‑One can only look fairly at the language used.

Government of Pakistan and others v. Messrs Hashwani Limited PLD. 1990 SC 68 rel.

(d) Interpretation of statutes‑‑‑

‑‑‑‑ Fiscal statutes‑‑‑Tax on any person is to be levied by clear and unambiguous words‑‑‑Expressions used in charging sections are not to be stretched by any process of interpretation, so as to bring a person within tax net not falling under clear and plain language of statute.

Government of Pakistan and others v. Messrs Hashwani Limited PLD 1990 SC 68; Pakistan Textile Mills Owners Association, Karachi v. Administrator of Karachi PLD 1963 SC 137; Messrs Hirjina & Co. (Pakistan) Limited v. Commissioner of Sales Tax Central, Karachi 1971 SCMR 128; Cape Brandy Syndicate v. Island Revenue Commissioner (1921) 1 KB 65 and Commissioner of Income‑tax v. Mst. Wazirunnisa Begum 1972 SCMR 116 ref.

Aqeel Ahmad Abbasi for Appellant.

Nemo for Respondent.

Date of hearing: 12th November 2002.

ORDER

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.‑‑‑All the above appeals at the instance of Revenue are directed against the order, dated 10‑4‑2002 by the Income Tax Appellate Tribunal Karachi Bench, in W.T.As. Nos.371 to 374/KB of 2001 pertaining to the assessment years 1995‑96 to 1998‑99.

In all the above appeals the following questions of law have been proposed for our consideration.

(1) Whether under the facts and circumstances of the case; the learned Income Tax Appellate Tribunal was justified by not dilating upon the very premises of the action under section 17B of the Wealth Tax Act, 1963 i.e. estimating of net worth by adopting gross rental value method because the Wealth Tax Law recognizes only the GALV as a base for arriving at the capitalized value, whereas the learned Income Tax Appellate Tribunal has not, commented upon on this score and has thus carried away with the assessee which has adopted net rental value for capitalization?

(2) Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in stretching the recovery section i.e. section 21 of the Wealth Tax Act, 1963 as a charging section in contravention to the established principles of interpretation of statute which enjoins that the plain meaning of law cannot be brought into the cort1plex interpretative regime?

(3) Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in holding that trust is not company whereas its status has been assigned as such under Para. B(2)(c) of Part I of First Schedule to the Income Tax Ordinance, 1979?

(4) Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in holding that the assessee is not a fictional individual especially when its shares among the beneficiaries are not determinable?

Heard Mr. Aqeel Ahmed Abbasi, learned counsel for the appellant. He has conceded that, basic point for consideration is whether, the Income Tax Appellate Tribunal was justified in holding that Trust is not a company and thus is not liable to the levy of Wealth Tax.

He has contended that, the Income Tax Appellate Tribunal has held that, a Trust is not a Company for the purpose of Wealth Tax Act, 1963, but while coming to the above conclusion it has been ignored that the expression person has not been defined in the Wealth Tax Act 1963, as has been done in section 2(32) of the Income Tax Ordinance, 1979. He has contended that the plea of the Revenue is that chargeability of Wealth Tax has been provided in respect to immovable property held for the purpose of business and construction or sale of letting out, of property as per section 2(5)(ii) of the following classes of persons;

(1) Firm

(2) A.O.P

(3) Body of individuals whether incorporated or not;

(4) A company

He has further submitted that in the light of the above provisions, the Income Tax Appellate Tribunal should have included the Trust in the scope of aforesaid classes of person. He has further submitted that, the view of the Revenue is that, if the minor act does not provide an explicit definition, the legal status assigned by the Major Act would prevail. He has next contended that a plea was raised before the ITAT that for the purpose of determining whether the Trust is a Company or not, the provisions contained in para. B(2) (c) of Part I of the First Schedule to the Income Tax Ordinance, ought to have been considered. According to the learned counsel, if the trust is not held to be a company then the status of trust for the purpose of Wealth Tax remains undetermined.

He has further submitted that the learned ITAT has misdirected in referring to the provisions contained in section 21 of the Wealth Tax Act, 1963, which is not a charging section.

Dilating on the principle of interpretation of the fiscal statute he has placed reliance on the following judgments:

(1) Government of Pakistan and others v. Messrs Hashwani Limited, PLD 1990 SC 68; (2) Pakistan Textile Mills Owners Association, Karachi v. Administrator of Karachi PLD 1963 SC 137; (3) Messrs Hirjina & Co. (Pakistan) Limited v. Commissioner of Sales Tax Central, Karachi 1971 SCMR 128; (4) Cape Brandy Syndicate v. Island Revenue Commissioner (1921) 1 K.B. 65 and (5) Commissioner of Income Tax v. Mst. Wazirunnisa Begum (1974) 29 Tax 188 (SC).

In the first case the Hon'ble Supreme Court observed as follows:

"The first and the foremost principle of interpretation is that words are to be taken in their literal meaning. The plain ordinary meaning of the word is to be adopted in construing a document. There have to be special circumstances where this principle is to be deviated and certain words, have to be interpreted differently than their plain meanings with reference to the context."

In the second case, it has been held as under:‑‑‑

"In a taxing statute, as in any other statute, there is no reason to depart from the general rule that words used in a statute must first be given their ordinary and natural meaning. It is only when such an ordinary meaning does not make sense that resort can be made to discovering other appropriate meanings."

In the third case the Hon'ble Supreme Court observed as follows:‑‑‑

"We may here observe that in interpreting the taxing statute the Courts must look to the words of the statute and interpret it in the light of what is clearly expressed. It cannot import provisions in the statute so as to support assumed deficiency."

In the fourth case Rowlatt, J. laid down the principle which has attained the status of classical principle pertaining to the chargeability of tax, in the following terms:‑‑‑

"It simply means that in taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, one can only look fairly at the language used."

In the fifth case the following principle appearing in the Statutory Construction by Crawford at page 270 has been affirmed:

"Where the statute's meaning is clear and explicit, word cannot be interpolated. In the first place, in such a case, they are not needed. If they should be interpolated, the statute would more than likely fail to express the legislative intent, as the thought intended to be conveyed might be altered by the addition of new words. They, should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur. Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute."

In the light of arguments addressed by the learned counsel for the‑appellant, his attention was drawn to section 3 of the Wealth Tax Act, which is a charging section. Section 3 reads as follows:

"Charge of wealth‑tax.‑‑Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of July, 1963, a tax (hereinafter referred to as wealth tax) in respect of the net wealth or assets on the corresponding valuation date of every individual, Hindu undivided family, firm association of persons or body of individuals, whether incorporation or not and company at the rate or rates specified in the Schedule."

Learned counsel for the appellant has candidly conceded that the Trust is not included in charging section. His attention was further drawn to the definition of company contained in section 2(9) of the Wealth Tax Act, 1963, which reads as follows:‑‑‑

"(9) `Company' means a company as defined in the Companies Ordinance, 1984 (XLVII of 1984), but does 'not include ah company‑‑‑

(i) in which not less than fifty per cent of the shares are held by the Government; or

(ii) the shares of which were the subject of dealing in a registered stock exchange in Pakistan at any time during the income year and remained listed on the stock exchange till the close of that year;

The learned counsel has conceded that the trust is not included in the definition of company. The company is defined in section 2(7) of the Companies Ordinance, 1984 as under:‑‑‑

"`Company' means a company formed and registered under this Ordinance or an existing company."

His attention was further drawn to the definition of company in section 2(16) of the Income Tax Ordinance, which is as follows:‑‑‑

"2(16) `company' means‑‑‑

(a) company as defined in the Companies Act, 1913 (VII of 1913); or

(b) a body corporate formed by or under any law for the time being in force; or

(bb) a trust formed by or under any law for the time being in force; or

A perusal of the above definition shows that sub‑clause (bb) was inserted by Finance Ordinance, 1983 and thereby a Trust formed by or under any law for the time being in force was included in the definition of company: This fiction of law is not found in the definition of company given in the Wealth, Tax Act, 1963.

It is established principle of the interpretation of statutes that the definitions given in a particular statute are to be employed for the purpose of the said statute only until and unless the definitions are adopted by any other statute through the legislation by incorporation or reference. A perusal of section 2 of the Income Tax Ordinance clearly shows that the definitions given therein are for the purpose of the Income Tax Ordinance only. For the purpose of Wealth Tax Act, 1963, the definitions of the terms expressions and words used in the said Act have been given in section 2 thereof. In subsection (2) of section 2 of the Wealth Tax Act, 1963, it is stated that, "the words and expressions used but not defined in this Act shall have the meaning assigned to them under the Income Tax Ordinance, 1979." Since the expression company has used in the Wealth Tax Act, 1963, is defined in section 2(9) of the said Act, therefore, the contention of the Revenue that, the learned ITAT ought to have interpreted the expression company used in the Wealth Tax Act, 1963 with reference to the definition given in the Income Tax Ordinance is not tenable and is without any substance.

In the judgments cited by the appellant itself, it is clearly stated that, in taxing statute one has to look merely at what is clearly stated. There is no room for any intendment. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, one can only look fairly at the language used. By now, it is established principle of the interpretation of fiscal statutes that, a tax on any person is to be levied by clear and unambiguous words and the expressions used in the charging sections are not to be stretched by any process of interpretation so as to bring a person within the tax net not falling and the clear and plain language of the statute.

For the foregoing reasons, we are of the opinion that, the learned ITAT has correctly interpreted the law in the light of the established principles of the interpretation of fiscal statutes pertaining to the charging of tax. The impugned finding of the learned ITAT that, a trust is not liable to the charge of wealth tax is not open to any exception and is hereby upheld. The contention of the appellant is without substance with the result that all the appeals stand dismissed in limine.

S.A.K./C‑57/KAppeals dismissed.